2588 days ago

EXTENSION TO BRIGHT LINE TEST ON THE WAY

Garry Tranter from Price My House for Free Limited

Legislation which will extend the bright line test on residential property sales from two years to five years is about to enter Parliament.
Revenue Minister Stuart Nash today confirmed he is introducing a Supplementary Order Paper to the Taxation (Annual Rates for 2017-18, Employment and Investment Income, and Remedial Matters) Bill to give effect to the changes.
The previous National government introduced the bright line test which requires income tax to be paid on any gains from residential property sold within two years of acquisition, with some exceptions.

Nash says the extension means that profits from residential investment properties which are bought and sold within five years will generally be taxable.

The changes, which were signalled by the Labour Party prior to last year’s election, will help dampen property speculation and make homes more affordable, he says.

"It will ensure that property speculators pay income tax on their gains and makes property speculation less attractive.

“We need investment which grows the economy and creates jobs, not the sort of investment which distorts the residential housing market.”

Not only will the measure bring fairness back into the tax system, but reducing speculative demand will help improve housing affordability for owner-occupiers, Nash says.

Current exemptions from the bright line test will remain. They include the sale of an owner-occupier’s main home, inherited property, or the transfer of property in a relationship settlement.

The extension to the bright-line test will apply to residential investment properties purchased from the date on which the bill receives the Royal Assent, which is expected in March.

Nash adds that the passage of the bill will also enable the Tax Working Group to factor the change into any consideration of a comprehensive capital gains tax.

Auckland Property Investors Association president Andrew Bruce has previously said that the changes will impact on property speculators rather than long-term investors.

"The majority of property investors are in it for the longer than five years and are unlikely to feel massive levels of pain with the extension of the bright line test."

More messages from your neighbours
7 days ago

Poll: Is your nearest emergency department up to scratch?

The Team from Neighbourly.co.nz

Concerns have been raised about Nelson Hospital with complaints of lack of staffing and excessive wait times. Do you have confidence in your local emergency department?

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Is your nearest emergency department up to scratch?
  • 36.7% Yes, it serves us well
    36.7% Complete
  • 62.5% No, I have concerns
    62.5% Complete
  • 0.8% Other - I'll share below
    0.8% Complete
1570 votes
3 hours ago

Bookfest: Giant Charity Book Sale

Heretaunga Bookfest Charitable

Bookfest is back for the first weekend in May!

Come on down to Whirinaki Whare Taonga in Upper Hutt, for a huge selection of books in over 40 categories, as well as magazines, games, jigsaw puzzles, CD’s, DVD’s and vinyl records (no audio or video tapes).

Come along and make your pre-winter selections at the 30th anniversary of this major event, there’s plenty to choose from!
Proceeds are for the benefit of the community in various ways.

Whirinaki Whare Taonga (formerly Expressions)
Sat 3rd May 9am-5pm
Sun 4th May 9am-3pm
Find out more

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3 hours ago

🏆 Only the Quickest Minds Will Get These Right… Are You One of Them? 😏

Riddler from The Neighbourly Riddler

Give this puzzle a whirl, can you figure it out?

Do you think you know the answer? Simply 'Like' this post if you know the answer and the big reveal will be posted in the comments at 2pm on the day!

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